After the Supreme Court decision to rule Aereo’s streaming service illegal and essentially shutting it out of business, the company is still, quite admirably, not giving up on its business. Earlier last week, CEO Chet Kanojia sent a letter to its customers urging them to notify Congress that they want the decision reversed, empathizing the important freedom of having access to a cloud-based antenna. Although such reversion seems highly unlikely in the short run, the trend of content consumption moving towards the OTT services providers will only keep gaining traction. In the long term, the broadcast industry can expect more Aereo-like services cropping up, as the cable customers and cord-cutters are always out looking for better, cheaper options.
Over-the-top video service Aereo was effectively shut down today after the U.S. Supreme Court declared their business model illegal. While CEO Chet Kanojia vowed to continue the fight to develop consumer-centric video solutions, the company’s main investor, Barry Diller, said the fight was over. Indeed, there is no way Aereo could continue in its current form without paying the same substantial retransmission fees that cable, satellite, and telco providers currently pay, eliminating its position as an inexpensive alternative.
To recap, in 2012, a temporary injunction filed by several broadcasters was denied by the Federal court in New York, citing a previous case involving Cablevision’s remote DVR service. The consensus among the judges was that since Aereo is designed to send signals to individual consumers, it is not broadcasting publicly and therefore not violating any copyright laws. That decision was upheld by a federal appeals court in April of last year.
While three of the Supreme Court Justices agreed with that assessment, the majority did not. In their minds, Aereo operates in the same way as any other multichannel provider, because it “receives programs that have been released to the public and carr[ies] them by private channels to additional viewers.” (You can read the full decision here). Because of that, said the Court, it too must comply with the Copyright Act of 1976, which is the law that enables broadcasters to collect retransmission fees from said providers.
Justice Scalia, one of the dissenters, expressed concern that the Court’s “improvised standard” will “sow confusion for years to come.” The fear in the technology world is that this will strongly discourage any innovative new over-the-top solutions for fear of being squashed by the broadcasters. For consumers, it whittles down the less expensive alternatives to having a traditional multichannel subscription—but the fact of the matter is, there is no evidence that current cable subscribers have any interest in abandoning their service.
Our latest estimates show that multichannel subscriptions are quite stable—while some consumers may switch providers, very few are abandoning their cable altogether. Which means that OTT options like Roku, Apple TV, and video game consoles are largely supplemental, and that the viewers that rely strictly on broadband for their video never had a multichannel subscription in the first place. But—as we’ve pointed out before—they must often relay on the same cable companies for their broadband connection.
Bottom Line: This decision is not surprising; the broadcasters have deep pockets and powerful lobbies in Washington. The truth of the matter is that even if Aereo had won, it wouldn’t have presented much of a threat to the broadcasters—at least not in and of itself. What could have been disruptive is the inevitable efforts by MVPDs to avoid retransmission fees by adopting a similar model. Even then, though, those services are likely to have appealed to a small contingent of consumers that never had a multichannel subscription to begin with, as those who have it don’t seem to be in any hurry to part with it.
According to a 6-3 Supreme Court ruling this morning, Aereo – the company that allows subscribers to stream TV stations over the Internet – violates copyright law and must stop functioning as such. It’s a reversal of lower courts’ decisions, which had mostly sided with Aereo because of their business model, which culls its signals from a network of tiny antennas distributed to subscribers. It’s unclear what Aereo’s next move is now, but what’s for sure is that they still believe in their product and believe that the present cable model will be undercut in the near future. It just might not be Aereo doing that undercutting anymore.
Even though Aereo has been under suit for quite some time, they’ve come out on the winning side of their legal battles, and are expanding into new cities. Detroit is next on the list, and the expansion will begin on October 28th. So for cordcutters that live in Detroit, the Aereo remote antenna for the top of the TV will be available to rent on that date. In addition, the Android app will be available on October 22nd. Right now, Aereo is available in New York City, Boston, Atlanta, Salt Lake City, Miami, Houston and Dallas. Pre-registration is open now for the Detroit area. As Aereo continues to expand into new cities and counties, it adds evidence to the fact that cord cutting is here to stay.
Aereo, the online broadcast TV streaming service, will release an android app in two weeks time in the Google Play store. Though the service is traditionally viewed within an Internet browser, or on iOS-mobile websites, Android access or viewing hasn’t ben possible. Though traditional TV has been pushing back against Aereo in the courts, the push to go Android shows that it’s essentially ignoring the suits at the moment. Broadcasters certainly won’t be happy, but they seem to be desperately trying to slow a fast-moving river of broadcasting and streaming applications that users are clamoring for.
ABC is providing a live-stream of local programming via their mobile app in a landmark move for a major broadcaster. Amidst competition from streaming services like Netflix and over the air service Aereo, ABC expedited their mobile viewing project initially planned for 2014 as they will be rolling out in select cities in time for the upfronts. The new offering is only available to paying cable subscribers however and will feature the same ads offered on abc.com.
There are not too many companies more disruptive than Barry Diller’s Aereo TV that grabs over-the-air television and sends them to user’s mobile devices and PCs over the internet. It’s a cord-cutters dream and a cable companies worst nightmare. Not surprisingly, the New York based company has had to spend a lot in court fees but a $38 million B round signals renewed strength from the web TV service with plans to expand in 22 more cities.
Temporary Injunction Against Barry Diller’s Aereo Is Denied
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